I said $60-70k, the idea being that the person making $40k is married to someone making $30k. Nonetheless, $60k is 24% of gross income is still well within the recommended affordability range, and well within the 31% lenders will qualify you to borrow. Even if one person is on unemployment (in Maryland it pays half salary for 6 months), that’s 32% of income. Tight, but on average that should last just a few months.
Even if we pop it back up to $70k--still too close if you ask me. Shit happens. Most people would be better off economizing on the house a little, and locking those savings in, rather than micro-managing nickel-and-dime expenses.
What the lenders will do is neither here nor there--given that most will do just about anything for a short-term buck. We all saw how that movie ends back in 2008. I just happened to see it over and over again.
What is so objectionable about telling people to give themselves a little more wiggle-room?
A $230,000 house on a $60-70k income is giving yourself more wiggle room. At $60k, you could qualify for something closer to a $300,000 house. That’s what most people do—yet the default rate for prime borrowers stayed below 5% even in 2008 (and is around 1-2% typically).
